TaxTMI 
TaxTMI 
2025 (11) TMI 1207
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.... 2.1 The controversy herein involved arises out a CIRP proceedings which came to be initiated against certain Megi Agro Chem Ltd.. The relevant facts are: a) On admission of the CD to CIRP, the first respondent herein was appointed as the Resolution Professional. The resolution process progressed to the stage of invitation of Expression of Interest (EoI, for short) through Form G. The RP Had issued Form-G at least thrice, since the first two attempts at the insolvency resolution process of the CD were not successful. b) In the first two occasions, the appellant very enthusiastically submitted its EOI, but it did not sustain its early enthusiasm as it failed to submit any resolution plans. With the leave of the Adjudicating Authority, the RP proceeded to issue a Form G for the 3rd time. Part of the issues which the appellant has raised in this appeal has transpired thereafter: • On invitation to submit EoI for a third time, the appellant submitted its EoI yet another time. Subsequently, the RP released its final list of PRAs, in which both the appellant and the 3rd respondent figured. They were invited to submit their resolution plan on or before 04.0....
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....ad with Sec. 29(c). Both Akhil Rishi Agarwal and Kamalesh Agarwal, however, resigned their directorship of the SRA some 20 days prior to the submission of the resolution plan, but it is only a device to outmanoeuvre the spirit of Sec.29A, and their design in so doing it cannot validate the participation of the 3rd respondent in the resolution process. In addition, the exemption granted to MSME under Sec.240A of the IBC does not exempt the operation of Sec. 29A (c) either. c) In terms of Regulation 36A(8) of the CIRP Regulations, 2016, the RP is required to conduct due diligence in ascertaining the eligibility criteria including Sec. 29A statutorily prescribed. This duty is given a go by. d) Regulation 19(2) of the CIRP Regulation stipulates that minimum 24 hours-notice must be given for convening the meeting of the CoC. However, the 12th meeting of the CoC was held on 20.09.2023) and the 13th meeting was convened on the very next day, on 21.09.2023, in less than 24 hours notice. Since the meeting convened itself are contrary to the Regulation, no sanctity can be attached to the decision of the CoC in approving the resolution plan of the 3rd respondent. e)....
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....ide. Indeed, it found that even the EoI itself was filed by someone else and not the appellant. So far contention vis-à-vis the bar under Sec.29A(c) of the IBC goes, the same will not apply to MSME which the SRA is. The Arguments 6. In her argument the counsel for the appellant merely expanded the argument with reference to specific documents. In particular she submitted that the eligibility criteria as was required was that the net worth of the applicant must be Rs. 10 Crores whereas, the declared net worth of Ahil Rishi (the SRA) is only Rs. 32,000/- Secondly it was not disputed that Akil Agarwal's father Rishi Agarwal's debt was notified as NPA. It is therefore, obvious that the RP had not examined the material particulars submitted by the 3rd respondent with due diligence. Still Akil was allowed to submit the plan. In other words, CoC has accommodated the one who statute bars from submitting a plan. Thirdly when the appellant had indicated his willingness to submit the resolution plan on 13.09.2023 and sought a meeting on 16.09.2023, the RP should have waited to convene the meeting of the CoC only on or after 16.09.2023. However, without granting the appellant a fa....
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....it its resolution plan. It, however, did not submit it by 04.09.2023, the last date for submitting it. Instead, it sought another 15 days for submitting its plan but the CoC had granted 10 days till 13.09.2023. According to the appellant on 12.09.2023, the day prior to the closure date of the extended time for submitting its resolution plan, it e-mailed the RP conveying its willingness to submit its plan by 13.09.2023, yet it did not submit one. And till the plan of the 3rd respondent was opened and approved the appellant did not make any attempt to submit its plan. It needs to be emphasised here that so far as the appellant's participation in the resolution process of the CD is concerned, the pattern it has assumed is not new. Twice during the earlier rounds of the resolution process, it had submitted its EOI and was also shortlisted as a PRA, but it failed to submit its plan. It is very evident that the appellant is almost habituated to abandon its participation in the resolution process of the CD midway through the game. Or, is it a mock participation motivated to defeat and delay the very resolution process? Irrespective of why the appellant got into the practice of dangling th....
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....C OnLine NCLAT 127 (2025) 253 Comp Cas 284], the Principal Bench of this tribunal took a contrary view. The facts in that case discloses that the appellant, a PRA, had participated in the resolution process, submitted its EoI, submitted its plan and also its revised bid. This tribunal held that the appellant had the locus since it has participated in the process. c) In Meir Commodities India Pvt Ltd Vs Mr. Narayanam Nageswara Rao & Other [C.A.(AT)(CH)(INS) No .206/2024], the Chennai Bench distinguished the judgement in Prio SA case on facts. That was a case where an was appeal field by the PRA, who had submitted its response to the EOI but not yet submitted a resolution plan, it was held that the PRA cannot be termed as an aggrieved person within the meaning of Sec. 61 of the Code. d) In Ganga Construction (Consortium) Vs Anil Kumar Mittal & others [C.A.(AT)(Ins) No:185 of 2025, dated 04.11.2025], the Principal bench of this Tribunal has considered a case of a resolution applicant who, though had submitted its preliminary plan but not the final plan, was held not to have a right to challenge the resolution process. Proceeding in rem and Locus Standi 11. Ther....
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....A proceeding in rem is a proceeding instituted against a thing, and not against a person. A proceeding in rem, in a strict sense, is one taken directly against property, and has for its object the disposition of the property, without reference to the title of individual claimants but in a larger and more general sense the term "proceeding in rem" is applied to actions between parties where the direct object is to reach and dispose of property owned by them, or of some interest therein. An act or proceeding is in rem when it is done or directed with reference to no specific person and consequently against or with reference to all whom it might concern, or "all the world". .... ..... Lawsuits brought against property as compared with those against a person; the court's jurisdiction does not depend on notice to the property owner." In Booz Allen and Hamilton Inc. Vs SBI Home Finance Limited [(2011) 5 SCC 532] where the Hon'ble Supreme Court, while differentiating an action in rem from action in personam, has held: (para 37) "..action in rem refers to actions determining the title to the property and the right of the parties, not mere....
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....s. (As to what constitutes material irregularity and how to ascertain it, see: the judgement in Dorni Vinimoy Pvt. Ltd., Vs Rachna Anachalia RP of Imperial Tubes Pvt. Ltd. & Others, C.A.411 of 2025 batch of cases, dated 13.10.2025) However, for them to challenge a particular material irregularity which they might allege as having occasioned, they must have participated in that stage of the resolution process where the alleged irregularity has taken place. A mere tag of a PRA or an unsuccessful RA by itself may not be adequate. Locus Standi of the Appellant 15.1 Turning to the facts of the present case, it is indisputable that the appellant has been busy purchasing time for filing the resolution plan. To go slightly backwards in time, as stated earlier, the appellant has submitted its EOI at least twice before and was also shortlisted as a PRA. It therefore, had access to the Information Memorandum of the CD, perhaps long prior to the SRA, and necessarily it had a longer time to prepare and submit its resolution plan. At least it knows or ought to have known what is expected of it and what it is expected to do. Still, it chose not to submit its resolution plan for a straight t....
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....16.2 And, lastly to whether the respondent is disqualified under Sec.29A(b) IBC read with Sec.29A(j), on the ground that the loan obtained by the business of the father of Akhil Rishi Agarwal, the director of the SRA, was notified as NPA. Inasmuch as this tribunal has found that the appellant has no locus standi to even prefer either an application before the NCLT or an appeal before this tribunal, and inasmuch as the issue will fall under the domain of the Adjudicating Authority vide the ratio in Arcelor Mittal case [(2019)2 SCC 1] it can take it up for consideration under Sec.31 IBC when it tests the legality of the resolution plan. We, therefore, refrain from passing our opinion on the same and consider it appropriate to leave it to the Adjudicating Authority to decide on it in the light of the ratio in Swiss Ribbons Pvt. Ltd., & another Vs UOI & others [(2019)4 SCC 17]. It is made clear that merely because we require the Adjudicating Authority to address this issue, appellant will not have a right of hearing before the NCLT as it has not even submitted its plan. Recommendation 17.1 This case shows how a PRA with no real locus standi can obstruct the conclusion of a CIRP, ....